ICE canola tests new highs, but hitting resistance

By Phil Franz-Warkentin, Commodity News Service Canada

WINNIPEG, June 2 – Canola contracts on the ICE Futures Canada platform were up at midday Tuesday, but were well off their highs for the day as the market ran into some resistance to the upside.
Both the nearby July contract and the new crop November traded above C$497 per tonne early in the day, but were about eight to ten dollars off of those highs by midsession as the C$500 per tonne level provided stiff psychological resistance.
Fund traders putting on long positions, together with other speculators covering shorts, accounted for some of the buying interest in canola, according to a broker.

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Recent frost damage in the eastern Prairies and ideas that not all of the area will be reseeded to canola added to the firmer tone in canola. Persistent dryness concerns in parts of Alberta and Saskatchewan were also supportive.
However, strength in the Canadian dollar did serve to limit the upside potential in canola. A downturn in CBOT soyoil, increased farmer selling, and overbought price sentiment also put some pressure on the canola market.
About 30,000 canola contracts had traded as of 10:37 CDT.
Milling wheat, durum, and barley were all untraded.
Prices in Canadian dollars per metric ton at 10:37 CDT: